A consortium of three Taiwanese and Australian steel manufacturers has applied for permission to build a steel plant in central Vietnam.

Taiwanese Sun Steel and Koncett and Australian Minmetan plan to put up a steel mill in Ha Tinh province at a cost of US$1.9 billion.

It will be designed to manufacture 2.4 million tons of steel, 1.7 million tons of pig iron and 4 million tons of ingots per year.

The three hope to cooperate with local enterprises to exploit the Thach Khe mine that is estimated to have reserves of 265.6 million tons.
Import licenses scrapped

In related news, Vietnamese companies were holding off on renewing scrap metal import contracts with foreign partners following a government decision to restrict the practice from July, the Vietnam Steel Association (VSA) said.

The move is aimed at minimizing the environmental impact of scrap metal stockpiles by limiting imports.

The ban could adversely affect companies that smelted scrap metal to produce ingots and sell to steel companies, VSA Chairman Pham Chi Cuong said.

Steel makers were financially incapable of importing the scrap themselves and would thus be unable to guarantee a reliable supply of steel.

This restriction would also make them reliant on import of ingots, the price of which had fluctuated dramatically in recent years, Cuong said.

Vietnam, which generates just 800,000 tons of scrap metal per year, is expected to import one million tons in 2006 and double that amount in 2007.

The scrap would be used to produce 1.5 and 3 million tons of ingots, respectively, in 2006 and 2007.

Steel output is expected to be 3.5 million tons and imports as much as 3.7 million tons this year.